Delhi: Registration of new companies in February this year increased by 37 percent to 24,136 compared to the same month last year, which reflects the strong business sentiment and increasing formalization of the Indian economy due to the government’s digital push. Registrations also rose steadily from 23,280 in January before slowing further in February. The service sector, especially IT services, consultancy and professional services, dominated the new registrations of companies. On an average, about 300 AI-related businesses are started every month. In February, 248 AI-focused companies were formed, showing the growth of the startup ecosystem in the country.
Most of the new businesses are private limited companies. For example, the average paid-up capital of companies formed in January was Rs 600,000, showing that entrepreneurship is on the rise from small businesses. The authorized capital or maximum capital that new businesses are allowed to raise is two to three times the paid-up capital, indicating potential for future investment. New government companies incorporated only a few per month and were limited to entities managing social sector initiatives, power transmission or other utility businesses.
Wholesale and retail trading is another important area of new business registrations, indicating the formalization of trading activities driven by the government’s digital push. Amit Maheshwari, managing partner of tax and consulting firm AKM Global, said the 37% year-on-year increase in company registrations is a strong sign of improving business sentiment and continued formalization of the economy.
He said, “The continued momentum, with the second highest number of incorporations this financial year in February, shows that entrepreneurs are preparing early for the next growth cycle. While registration alone does not guarantee economic expansion, this trend clearly signals confidence in India’s regulatory and growth framework.” AMRG Global Partner Rajat Mohan said the government’s Startup India Framework has significantly changed the entrepreneurial risk-reward matrix with steps such as granting tax holiday eligibility to DPIIT-recognized startups and reducing compliance thresholds for small companies and one-person companies.
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